Wednesday, April 26, 2006

Is there a need for a CIO?

Recently the Corante Innovation Hub members took up the question of the new "Chief Innovation Officer" and the value that such a role could bring to a firm. I think the idea of a Chief Innovation Officer is a good one, if properly implemented.

What we don't want to do is add another layer of red tape and overhead to innovation, nor allow it to become a top-down process. Too often when a new senior executive position is created, the role drives a whole new bureaucracy, which means new rules, new reviews and so forth. If the CIO shouldn't create a new hierarchy, what would this person focus on?

It seems to me that innovation is similar to any other business process - that is, innovation is about moving a great new idea through a series of steps from initial concept to final commercialization as a new product or service. Rather than following a "top down" model, innovation follows a horizontal process across many different business functions and organizations to come to final fruition. Additionally, good ideas can happen anywhere in the organization, or even outside the organization. It should not be the CIO's job to originate the ideas or even "own" them.

It seems to me that the CIO needs to be a forceful advocate for innovation across the business, and should fund or sponsor teams or ideas to work to generate, evaluate and launch ideas. A good model would be an internal incubator within the organization where teams from different business functions or even internal employees and external business partners can come together and work on these new concepts. The CIO should be a forceful advocate for innovation and work with the senior leaders of the organization to impact the culture and the motivations (compensation) of the employees, to generate excitement and enthusiasm about innovation. The CIO should also seek out the trends in the industry or market to understand the next big opportunities and constant scan the horizon for what's likely to happen next, and confirm that vision with his or her management peers. In this manner the CIO ensures that the ideas being worked are ones that have value to the organization.

The CIO should establish one or more innovation processes, to define how certain types of ideas should flow through the organization on their way to become new products or services. What are the appropriate measures for a new idea under consideration? Certainly ROI is one we've used in the past, but is that a realistic measure in the short run? How should ideas be evaluated? Who should participate? Having a well-defined process with active participation means ideas get consistent evaluation and everyone understands the importance of the ideas.

If the VP of Sales could not communicate and quantify a sales pipeline for the coming quarter, we'd have concerns. For innovation in many firms, there's no one responsible for defining the process or the innovation pipeline, or reporting it and managing it.

I think there's a clear need for a Chief Innovation Officer who can work across the organization, sponsor great ideas and teams and act as an advocate for innovation within the business, as well as manage and report the innovations that are happening. However, this role will fail if the CIO takes a top-down approach, attempting to dictate which ideas are good or bad, or which groups or teams can or can't innovate. The role will also fail if the ideas are not tied to business requirements or needs. The CIO also must have his or her finger on the pulse of the business, and what the short and long term goals are, as well as the nascent trends.

This role as I've defined it is more about moving an idea through the "system" effectively and acting as a coach, scout and cheerleader than it is about dictating which ideas or which teams. The CIO must be great at working across functional or product boundaries and have the full confidence of the management team. He or she should be measured on the number of ideas generated, and the number of new products or services that are launched and their profitability.

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